For personal use only

Transcription

1 31 January 2017 QUARTERLY REPORT Period Ended 31 December 2016 Highlights Successful Proof of Concept (POC) completed for PGascom PT PGas Telekomunikasi Nusantara (PGAS). POC also completed and approved with leading mobile operator, Smartfren as part of the PGAS Heads of Agreement. Successful workshop held in December with PGas in Perth to collaborate and finalise Business Plan. Expansion into Latin America through two Memorandum of Understanding (MOU) with two established Brazilian Telecommunications Companies, SOL Telecom (SOL)) and Amazonia Publicidade Ltda (GTV) to provide the technology platform for the delivery of OTT television to the region of Brazil. Successful POC for both Sol and GTV completed. Heads of Agreement (HOA) signed with Netherlands based Health and Fitness Company Body Works International BV to launch the Company s first health and wellbeing OTT content initiative using TV2U s Intelligent Video Accessible Network (ivan). Strengthening of board has commenced to ensure TV2U has the right team to lead the company through this important phase of growth. Successful Placement of $1 million. The Board of TV2U International Limited (TV2U or the Company) is pleased to provide the following commentary and for the Quarter ended 31 December During the past quarter the Company has focussed on the completion of commercial contracts. We have satisfied all requirements for PGas, SOL and GTV from a technical aspect and are working towards finalising commercial contracts. The level of interest in the technology of TV2U from various industries is very encouraging and endorses the unique capabilities of the technology. Commercial success is an absolute focus, though a more concerted effort is being made to educate the market on the unique technology TV2U has access to. This was highlighted last quarter when the company was humbled to become a finalist in the Managed Services World Congress Awards. The Innovation Award finalist award is given to a company that best exemplifies innovation in technology, business change or operational transformation. TV2U, which was nominated for its Intelligent Video Accessible Network (IVAN), joins other leading companies like Chinese mobile device company Huawei, NEC subsidiary Netcracker Technology and telecommunications leaders Vodafone and Nokia as shortlisted finalists.

2 The development team continues to expand the feature set of its industry leading Cloud Technology OTT platform which has successfully been approved in three recent POC s. The Company thanks shareholders for their patience in recent months and looks forward to ensuring a successful rerating of the Company s market capitalisation via the completion and delivery of its emerging markets and beyond OTT service delivery growth strategy. KEY AGREEMENTS & BUSINESS OPPORTUNITIES PT. PGAS Telekomunikasi Nusantara On 26 October 2016, the Company signed a Heads of Agreement (HOA) with PT. PGAS Telekomunikasi Nusantara (PGAS) to deliver white labelled interactive OTT managed service into to the region of Indonesia, the world s fourth most populous country with a population of 250 million. PGAS will pay US$3.5 million for the installation of a mini-me Head-End located at PGAS s datacentre in Jakarta and a monthly management fee per active subscriber PGAS is a subsidiary of the Indonesian government-owned PT. Perusahaan Gas Negara (Persero) Tbk (PGN), the largest natural gas transportation and distribution company in Indonesia. PGN generated more than US$3 billion in revenue in Under the agreement, PGAS s business customers will be able to on-sell TV2U entertainment services including videoon-demand, games, music and karaoke. Revenue will be generated through a monthly subscription fee, pay-per-view and personalized advertising. The Indonesian group will also be able to bundle the TV2U entertainment offering with its existing gas, telephony and data services allowing PGAS to offer a quadruple play offering to its new and existing customers. PGAS fibre provides the backbone to 70% of all Indonesia s ISPs (Internet Service Providers) which equates to an estimated 40 (forty) million household broadband users. PGAS goal is to provide OTT entertainment to an estimated 5 (five) million active monthly subscriber over a 2 to 3 year timeframe. SOL Telecom and GTV Brazil has been a major target market for TV2U for some time as it has around 19.5 million Pay TV subscribers and is the biggest market in all Latin American countries. Pay TV has a very large growth potential given that Pay TV penetration is below 30% and many telephony and internet providers are looking to expand their footprint in the coming years while complementing, or in some cases even replacing, the core Pay TV offerings with new OTT services. A recent industry report on OTT TV and video revenues in Latin America (for 18 countries) will reach $3.59 billion in 2021 which is more than triple the $1.15 billion in SVOD (subscription video on demand) will remain the region s largest OTT revenue source; contributing $2,093 million by 2021 (or 58% of the total). POC completed and moving towards commercial contract.

3 Karaoke2U TV2U s Karaoke2U App is currently on IOS and Android in 19 countries including Armenia, Australia, Azerbaijan, Belarus, Hong Kong / SAR China, Indonesia, Kazakhstan, Kyrgyzstan, Malaysia, Moldova, New Zealand, Pakistan, Russia, Taiwan, Tajikistan, Thailand, Turkmenistan, Ukraine and United Kingdom. After the initial soft launch, the Company is now preparing for an official global online marketing campaign over the coming months to coincide with the major feature rich upgrade of K2U completed in September which includes Karaoke performance video publishing, sharing of content, chat and friends features, which will boost downloads, subscriber numbers and revenue. Appointment of High Profile Technology Sector Director Appointment of Mr Alan Boyd who is an experienced technology, media and intellectual property investment and development specialist with a long record of success in Europe, America and Asia. Mr Boyd served as the first Product Development Manager at Microsoft, which he joined in He was responsible for the development of many ubiquitous software products, including Microsoft Word, Excel, MS-DOS and Windows that have become household names and sold billions of copies. Mr Boyd has advised the Chinese Government on technology and IP development. His knowledge and business network in China will be of importance in presenting TV2U technology to commercial opportunities in China. Divan.TV Collaboration Divan.TV, has begun marketing activities of its expanding content offering to its one million plus users across Russia and the Commonwealth Independent States (CIS). The collaboration agreement with Divan.TV enables TV2U content to be delivered into the region via a trusted and fully operational partner. Recently, a number of illegal streaming companies have been closed down by the Ukrainian cyber police unit which provides confidence of a change in law as well as the Country s economic recovery post several geopolitical issues during This provides an environment in which premium content can be taken to market with greater confidence. The Divan collaboration is on track and focused to make a joint service within the CIS region economically viable for both companies.

4 Toomai Africa OTT Managed Service Contract During the September quarter, telecoms provider NPBB GROUP, LLC through its subsidiary Toomai Broadcasting Telecommunications Corporation Ltd (Toomai) selected TV2U to provide its OTT service. Toomai is a new business with NPBB GROUP developing this business over the last 2 years. This service provision will be for a bespoke white labelled cloud-based interactive OTT/IP managed services as its provider for the delivery of international and regional linear, on-demand, and Karaoke content. TV2U will deliver the ultimate personalized interactive entertainment viewer experience through real-time viewership and social media analytics. The analytics provided by TV2U s integrated platform will give NPBB GROUP, LLC via its subsidiary Toomai, detailed insights about its customers, providing an overview of their demographics and location as well as their viewing habits including what content they are consuming, when, where and over what device. By the analysis of data, the partnership can turn data into insight, insight into intelligence, intelligence into action and actions into results, maintaining viewer engagement from the recommendation of content and entertainment to highly personalized targeted advertising. TV2U reached and agreed commercial terms with Toomai, for the engineering and launch of this service which includes; Upfront CAPEX payment in excess of $1,000,000 for the head-end expansion at TV2U s head end at NTT Japan s data centre in KL Malaysia. Managed service fee based each active subscriber per month with a minimum guaranteed number of subscribers. Cost of Content provisioning and delivery. Revenue share on karaoke and advertising. At this time, TV2U have received no funds from Toomai and the Company has expended no resources on this project and will not do so until initial payment is made. TV2U continues to liaise with Toomai to finalise first round payments and will update shareholders once we have certainty. Recent key announcements to the market is an endorsement of TV2U s disruptive technology and business concepts in the OTT market. By providing a cloud managed service that attracts, wins and retains customers, through the use of disruptive personalized managed campaigns and providing a set of software tools that empower our clients to proactively drive revenue generation while reducing churn rates by maintaining existing customer retention with the addition of content acquisition on behalf of our customers provides a unique selling proposition to the industry.

5 Corporate On 1 November 2016, the Company s securities were suspended from trading in relation to a Cleansing Notice issued on 26 th October 2016 relating to the issue of Ordinary shares on 26 th October 2016 ( Shares ) which did not exempt the sellers of the Shares from their obligation to make disclosure pursuant to s707(3) of the Corporations Act 2001 because the Shares were not in a class of securities that was trading on the ASX and not suspended for more than a total of five (5) days during the previous twelve (12) month period. The Company prepared a Short Form Cleansing Prospectus and lodged this with ASX on 4 November In addition, the Company lodged an application with the Federal Court of Australia seeking urgent declaratory relief and ancillary orders relating to the issue of securities and the subsequent offer for sale or sale by subscribers to those securities. The Company sought orders declaring that any offer for sale or sale of the securities from the date of issue of the securities until 28 th November 2016 was not invalid by reason of the sellers failure to comply with s707(3) of the Corporations Act On 14 December 2016, the Company was granted the relevant court orders and was reinstated to trading on ASX. On 28 December 2016, the Company completed a placement of 76,923,076 fully paid ordinary shares at A$0.013 per share to raise $1,000,000 plus a 1 for 4 free attaching option on the same terms as the currently listed options (ASX: TV2O) to institutional, professional and sophisticated investors (Placement). In addition, the Company announced a 1 for 10 non-renounceable rights issue (Rights Issue) to raise approximately $1,602,659 (before costs) through an offer of up to a maximum of 123,281,433 Shares via a Rights Issue Prospectus dated 23 December 2016, and lodged with ASX on this date. Shareholders who participated in the Rights Issue were also eligible to receive a 1 for 4 free attaching option on the same terms as the currently listed options (ASX-TV2O). The Rights Issue was completed subsequent to the end of the quarter. Funds from the Placement and Rights Issue will be used to strengthen the Company s cash position moving into the final stages of service delivery for important contracts in Indonesia and Brazil.

6 Investor Enquiries: Tom Young Corporate Communications About TV2U TV2U is a global complete entertainment platform that enables businesses, such as telecommunications companies, to quickly and easily offer streaming content to their customers. The service includes movies, television programs, karaoke content and games through an encrypted channel for enhanced copyright protection. TV2U also offers unique real-time viewership analytics to enable businesses to send highly targeted advertising to end-users to maximise their revenue streams. TV2U is changing the face of online entertainment and advertising.

7 +Rule 4.7B Introduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10, 01/09/16 Name of entity TV2U International Limited ABN Quarter ended ( current quarter ) December 2016 Consolidated statement of cash flows Current quarter Year to date (6 months) 1. Cash flows from operating activities 1.1 Receipts from customers Payments for (a) research and development (155) (288) (b) product manufacturing and operating - - costs (c) advertising and marketing (24) (67) (d) leased assets - - (e) staff costs (525) (963) (f) administration and corporate costs (565) (1,207) 1.3 Dividends received (see note 3) Interest received Interest and other costs of finance paid Income taxes paid Government grants and tax incentives Other (provide details if material) Net cash from / (used in) operating activities (1,268) (2,520) 2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment - (72) (b) businesses (see item 10) - - (c) investments See chapter 19 for defined terms 1 September 2016 Page 1

8 Consolidated statement of cash flows Current quarter Year to date (6 months) (d) intellectual property - - (e) other non-current assets Proceeds from disposal of: (a) property, plant and equipment - - (b) businesses (see item 10) - - (c) investments - - (d) intellectual property - - (e) other non-current assets Cash flows from loans to other entities Dividends received (see note 3) Other (provide details if material) Net cash from / (used in) investing activities - (72) 3. Cash flows from financing activities 3.1 Proceeds from issues of shares Proceeds from issue of convertible notes Proceeds from loyalty entitlement issue Transaction costs related to issues of shares, convertible notes or options (66) (86) 3.5 Proceeds from borrowings Repayment of borrowings Transaction costs related to loans and borrowings Dividends paid Other (provide details if material) Net cash from / (used in) financing activities Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of quarter/year to date 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 1,421 2,606 (1,268) (2,520) - (72) See chapter 19 for defined terms 1 September 2016 Page 2

9 Consolidated statement of cash flows 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of quarter Current quarter Year to date (6 months) - - 1,013 1, Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts Current quarter Previous quarter 5.1 Bank balances 1,013 1, Call deposits Bank overdrafts Other (provide details) Cash and cash equivalents at end of quarter (should equal item 4.6 above) 1,013 1, Payments to directors of the entity and their associates Current quarter $A' Aggregate amount of payments to these parties included in item Aggregate amount of cash flow from loans to these parties included in item Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2 All transactions involving directors and associates were on normal commercial terms Payments to related entities of the entity and their associates Current quarter $A' Aggregate amount of payments to these parties included in item Aggregate amount of cash flow from loans to these parties included in item Include below any explanation necessary to understand the transactions included in items 7.1 and See chapter 19 for defined terms 1 September 2016 Page 3

10 8. Financing facilities available Add notes as necessary for an understanding of the position Total facility amount at quarter end Amount drawn at quarter end 8.1 Loan facilities Credit standby arrangements Other (please specify) Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well. 9. Estimated cash outflows for next quarter 9.1 Research and development (120) 9.2 Product manufacturing and operating costs Advertising and marketing (25) 9.4 Leased assets Staff costs (400) 9.6 Administration and corporate costs (250) 9.7 Other (provide details if material) Total estimated cash outflows (795) 10. Acquisitions and disposals of business entities (items 2.1(b) and 2.2(b) above) Acquisitions Disposals 10.1 Name of entity N/A N/A 10.2 Place of incorporation or registration 10.3 Consideration for acquisition or disposal 10.4 Total net assets 10.5 Nature of business + See chapter 19 for defined terms 1 September 2016 Page 4

11 Compliance statement 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A. 2 This statement gives a true and fair view of the matters disclosed. Sign here:... Date: 31 January 2017 (Company secretary) Print name: Sarah Smith Notes 1. The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report. 2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standard applies to this report. 3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity. + See chapter 19 for defined terms 1 September 2016 Page 5